Malaysia Auditor General Blasts Government, Police, and GLCs

When Malaysia’s ruling coalition, Barisan Nasional, was nearly thrown from power in the May 2013 elections, arguably the biggest grievance from disgruntled voters was corruption. Now, a report released by the Auditor General has leveled numerous criticisms at the government and is sure to fuel the opposition and its criticisms of the ruling party.

Corruption in Malaysia

While Malaysia has enjoyed substantial economic growth over the past several decades, many critics accuse the government of engaging in massive levels of corruption. From public funds being diverted to private bank accounts, to awarding bloated contracts and buying equipment at huge market ups, the government has been criticized for lining the pockets of supporters and cronies. Now, the AG’s report is fueling such critics and offering ammo for the vocal opposition.

The Auditor General found five general “weaknesses” in the government that have plagued it from top-to-bottom. These weaknesses include improper payments, work or supplies not being delivered according to specifications, waste, bad asset management, and unreasonable delays. The Auditor General also criticized the government for numerous other “smaller” issues, including bad project management, outdated IT systems, and lack of concern over the effectiveness or impact of projects being implemented.

Malaysian police losing equipment

Beyond these general criticisms of the government, the Auditor General also criticized the police for “losing” large amounts of equipment. The Malaysian police force has managed to lose nearly 160 sets of handcuffs, 44 firearms, 26 walkie talkies, 22 radios, 6 cameras, 4 computers, 1 cellphone, and 21 other items.

While losing a walkie talkie or set of handcuffs might be defensible, the loss of guns and vehicles is rather perplexing. The gun issue comes at an especially sensitive time as Malaysia has seen a huge increase in gun related violence. The police claim that the guns have fallen into the sea while on ocean and river patrols. So far, there is no word if the 29 missing automobiles also fell into the sea and the police have offered little explanation.

Government linked companies

The AG’s report also blasted government linked companies, which the Opposition have charged are en de facto controlled and protected by the Barisan Coalition. Beyond the general charges of waste and bad project management, the AG’s report singled out 7 GLCs for awarding bonuses at the time when the companies were running in the red. Interestingly, the Treasury actually defended the move by claiming that the companies were not necessarily set up to generate a profit, but instead to assist with nation building.

Malaysia’s most important GLC Petronas, however, was not subject to the audit as only the Prime Minister has direct access to the companies’ financial information. Petronas has been in charge of extracting Malaysia’s oil and natural gas wealth. The company is believed to supply approximately 50% of the government’s revenues and has helped fuel Malaysia’s impressive economic growth.

Access to Petronas’ financial statements

Access to Petronas’ financial and balance sheets has long been a goal of the opposition. Malaysia has some of the world’s highest illegal capital out flows, meaning money is being illegally removed and hidden in overseas bank accounts. Many believe that large portions of Petronas’ revenues are being funneled into secret bank accounts abroad.

Online newspapers in Malaysia have been lambasting the government while government influenced traditional media sources have largely downplayed the AG report. Either way, the stinging report is sure to fuel the Opposition and weaken Barisan Nasional. Unless the ruling party is able to cut down on corruption and increase the efficiency and effectiveness in the way government money is spent, BN may be setting itself up for future failure.